With the rise of TikTok and Instagram Reels, short videos are now one of the most popular online video formats. To keep up with this trend, YouTube has launched YouTube Shorts Ads, giving advertisers the ability to run short-form video ads exclusively, rather than as part of a wider video or Google Demand Gen campaign.

According to YouTube CEO Neal Mohan, YouTube Shorts now generate more than 70 billion views every day — 20 billion more than in January 2023. YouTube has been incentivising creators to make more short videos by promising them wider reach, more exposure, and greater visibility on the platform.

So far, the financial returns haven’t been as good as for long-form videos. But with YouTube now saying they’ll pay creators 45% of the net revenue from Shorts videos, this format offers a genuine short video-based revenue stream for the first time. This feature is in beta for the time being, but will soon be available to everyone.

Here, you’ll learn everything you need to know about YouTube Shorts Ads, including ad specs, setup, costs, and how to get the most conversions from this new format.

What are YouTube Shorts ads?

YouTube Shorts Ads are vertical video ads that appear in the YouTube Shorts Feed. They follow the same format as other YouTube Shorts; each ad lasts up to 60 seconds and can be skipped/scrolled past. Here’s how Google defines YouTube Shorts Ads:

“Ads on Shorts are skippable video or image ads that show up between Shorts in the Shorts Feed. The Shorts Monetisation Module allows your channel to get shared revenue from these ads.”

Shorts Ads have been around since 2022, but YouTube is working to give marketers more options when it comes to video advertising. A Google spokesperson said:

“YouTube is a dynamic platform, so advertisers are encouraged to take advantage of the solutions that allow them to achieve their goals fluidly across formats. The new YouTube Select lineups are Shorts-specific. And with the evolution of Video reach campaigns, advertisers can opt in to just Shorts or other surfaces, should they choose.”

When the beta is fully rolled out, all advertisers will be able to run Shorts Ads as standalone ad campaigns (i.e. without running in-stream or in-feed ads at the same time).

YouTube Shorts ads specs

YouTube Shorts Ads can be square or vertical, but each ad must follow a specific format. The table below shows all the specs you need for your Shorts Ads:

Uploading a video asset that meets these specs will automatically categorise it as a Short.

How much do YouTube Shorts ads cost?

YouTube Shorts Ads cost a similar amount to other YouTube Ads. This is approximately $0.05 to $0.30, depending on your industry, keyword competition, and other factors.

YouTube Shorts Ads are charged per view. This is known as a cost-per-view pricing model, and it means the advertiser pays whenever a viewer engages with their ad. Engagements are counted if the viewer:

• Watches at least 30 seconds of the ad
• Watches the full ad (if it’s less than 30 seconds long); or
• Clicks a link in your video ad.

The benefits of YouTube Shorts ads 

Shorts Ads are a good way to expand your video advertising reach. Here are five reasons to use YouTube Shorts Ads as part of your PPC efforts:

• Increase brand awareness — With more than 70 billion views every day, advertising via YouTube Shorts is a great way to get your name out there among your target users.

• Control your ad placement — Because you can now deselect in-feed and in-stream placements, you have more control over where your Shorts Ads show up.

• Control your ad spend — Improved targeting and control over ad placements may help you manage your video advertising budget better.

• Expand your target market — YouTube Shorts can be targeted at a similar audience to TikTok. But as YouTube is a well-established video platform, it’s also popular with older audiences. So you may reach new markets with YouTube Shorts Ads.

• Less invalid traffic — According to our Wasted Ad Spend Report 2024, YouTube has less invalid traffic than all other major ad platforms. So your ads are less likely to be affected by bots and other fake users.

How to set up YouTube Shorts ads 

Follow this step-by-step guide to set up a Shorts-only ad in your Google Ads account:

1. Sign in to your Google Ads account and create a new campaign (without a goal’s guidance).

2. Select Video for your campaign type.

3. Select Efficient Reach as your campaign subtype.

4. Under Multi-format Ads, tick “Reach more unique users with multi-format video ads.” Then deselect In-Stream Ads and In-Feed Ads so only Shorts Ads are allowed.

5. Adjust the rest of your campaign settings and upload your video asset(s), then click Create Campaign.

Targeting and functionality for Shorts ads 

Audience targeting for Shorts Ads is similar to other Google Ads formats. You can target via user demographics (age, location, gender, income, and parental status) or custom audience segments.

You can also target Shorts Ads based on content category, using keywords, topics, and placements to refine your targeting options. Targeting based on similar channels isn’t available yet, but may arrive in future.

In terms of other functionality, you’ll be able to see the reach, frequency, and view-through rates of your ads. While you won’t be charged unless a viewer watches at least 30 seconds of your ad, you’ll receive an impression if they watch just 10 seconds.

You can also protect your brand safety by using third-party providers like Integral Ad Science. Learn more about brand-safe targeting for video ads.

What are marketers saying?

Drawing on information from PPC Specialist Kristian Maltzahn, Senior Paid Search Consultant Yoann Ferrand highlighted the launch of YouTube Shorts Ads in his weekly LinkedIn newsletter, PPC News:

Kristian has explained why the Shorts format is important in modern advertising:

“The Shorts format opens up for a whole new way of approaching YouTube Ads. YouTube ads have for a long time been a platform for TV-quality advertising, which is of course really interesting and still very relevant. However I think the demand from consumers is changing, which we have seen with ads on platforms like TikTok and Instagram Reels.”

Many other marketers are also looking forward to the opportunities YouTube Shorts Ads will bring for advertising and content monetisation:

(TikTok splits revenue 50/50 with approved creators — those who have more than 100,000 followers — while there’s currently no subscriber limit with YouTube Shorts.)

Most marketers seem to be excited about the potential for YouTube Shorts Ads (especially as it gives you more options, unlike many of Google’s recent releases which have actually taken back control from marketers). But there are some who have reservations around user experience and recommendations like the three commenters below:

Best practices for YouTube Shorts ads

Ultimately, using short-form ads doesn’t guarantee you success in your video ad campaigns. You need to know how to get the most from them to give your video advertising a genuine boost and see a better return on ad spend. Use these best practices to run effective (and lucrative) YouTube Shorts Ads.

1. Find the right hook

Good short videos catch the viewer’s attention within just a few seconds. So you need a hook that will keep them watching. HubSpot’s Jamal Meneide explains what makes an effective hook:

"Like any other short-form content, you have to include a hook in your video’s first five seconds to keep folks interested. A hook can take many forms: a question, common problem, or a pain point. Make it strong enough to persuade the viewer to continue watching."
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Jamal Meneide
Cinematographer, HubSpot

2. Include a clear call-to-action

Make sure viewers know how to act on your ad. This Shorts Ad from Cadbury has a simple, clear, compelling CTA in this Christmas campaign:

3. Don’t waste time

Short-form video viewers want instant gratification. So avoid slow intros and use sharp, snappy images and audio that compels viewers to stop scrolling. This includes selecting a strong cover image for your ad. As Jamal suggests:

"You want an expressive or bright image with grabby text to get your audience’s attention. Think about it like this: what image would make you stop scrolling on your feed and click to open that video?"
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Jamal Meneide
Cinematographer, HubSpot

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4. Choose the right soundtrack

Lots of songs and audio snippets go viral thanks to TikTok. Jumping onto these trends before they disappear can help you connect with viewers, so consider using trending songs to soundtrack your Shorts Ad.

5. Keep it short

Although your ad can technically last up to 60 seconds, video marketing statistics show that shorter ads tend to work best for short-form videos. TikTok researchers found that 50% of a TikTok ad’s impact happens within the first two seconds. The first six seconds account for 90% of ad recall and 80% of awareness.

6. Compare with other video ad results

If you’re already running other types of video ads (either in YouTube or on other platforms like TikTok and Instagram) it’s important to check you’re using the most efficient ad channels.

After running your Shorts Ads for a few weeks, compare conversions and other advertising KPIs with your other video campaigns to see if it’s worth investing more in this ad format and platform.

If there’s room for improvement, check out our tips for boosting conversions with video ads.

Improve your video ad ROI with Lunio

YouTube Shorts Ads give you more opportunities to reach your target audience, especially if you’ve already had success with TikTok advertising and other short-form video ads. With shorts-only placements, you can reel in your ad spend and ensure your Shorts Ads are only seen by YouTube Shorts viewers.

But like long-form video ads, YouTube Shorts Ads can be affected by invalid traffic (IVT). Bots and other fake users can click your ads, draining your ad spend without giving you any return. And while YouTube has lower rates of IVT than other platforms, there’s still a good chance you’re wasting money on fake users.

Lunio removes invalid traffic to ensure only genuine users click your video ads. This can boost conversions, reduce wasted ad spend, and decrease spam leads. For a free traffic audit and two-week trial, book a demo to see Lunio in action.